Blog

The Federal Reserve has a tough task ahead of them. Unfortunately, they have backed themselves into a tight corner over the last several years. As much as they want a “soft landing”, it’s becoming obvious that is not likely.

So, why the recent optimism in the stock market? I think that there is a sense that inflation will be coming down sooner, rather than later. That would allow the Federal Reserve to ease off on their interest rate increases. I believe that this thinking is wrong.

It’s important not to get too worried about the day-to-day gyrations of the markets. For one, it’ll drive you nuts.

Over the last few weeks, I’ve come to realize that I think I’ve been thinking wrong about a very important factor in the “next normal” for our economy. And, I think many policy makers and business leaders are thinking wrong about it, too. The issue is about the return to office versus work from home debate.

Earlier this week, the prevailing rate for the 5 year US treasury bond went higher than the prevailing rate for the 10 year US treasury bond. Yesterday, the 5 year exceeded the 30 year US treasury bond. Today, the 2 year US treasury bond has passed the 10 year.

This morning, after finishing her breakfast, Clara asked us what day it was because she’s said she couldn’t keep track. I thought about that later, and I agree. I can’t hardly keep track of what day it is, or what’s going on in the world.